Trump’s Executive Orders, TikTok, WeChat, The Bill & Melinda Gates Foundation, Vaccine Production and Uber

Trump takes action against Chinese apps, the Bill & Melinda Gates Foundation funds vaccine production for developing countries and Uber slides with no recovery in sight.
Washington, D.C. - June 12, 2019: President Donald Trump addresses reporters' questions at a press conference in the Rose Garden of the White House with Polish President Andrzej Duda. (By Evan El-Amin)
Washington, D.C. - June 12, 2019: President Donald Trump addresses reporters' questions at a press conference in the Rose Garden of the White House with Polish President Andrzej Duda. (By Evan El-Amin)
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Good morning! Today’s word count is 1,439 words, or a 10-minute read. Let’s get to it:

“U.S. stocks slipped as the latest employment report showed the economy added more jobs than expected last month, though the pace of the recovery stalled,” The Wall Street Journal writes.

  • S&P 500: $3,340.05
  • Nasdaq: $11,072.50
  • Bitcoin: $11,776.77
  • U.S. 10-Year: 0.550%

Trump Executive Orders Target TikTok, WeChat Apps

President Trump issued a pair of executive orders imposing new limits on Chinese social-media apps TikTok and We Chat. The move bars people in the U.S. or subject to U.S. jurisdiction from transactions with the China-based owners of the apps. It goes into effect 45 days from Thursday, creating a limited window for an American company to purchase TikTok’s U.S. operations.

Why It Matters

Trump has officially doubled-down on the argument that China-based apps pose an “economic and national-security threat to U.S. interests.

  • U.S. officials have continually expressed concerns that China’s authoritative government would have access to the data TikTok collects form users.
  • TikTok has said it would never hand over such data.
  • Hours before Trump signed the order, the Senate unanimously passed a bill prohibiting federal employees from using TikTok, or any future ByteDance apps, on government-issued devices.

It’s deal or no deal time.

  • Microsoft is the front-runner, and possibly the only contender, among U.S. companies to land TikTok.
  • The order formalizes Trump’s earlier threats to shut down the app should no American buyer complete the deal.
  • It’s imperative to get the deal done in the 45-day window as contracts agreed to before the period elapses aren’t subject to the prohibitions in the order.

The order is quickly souring the U.S.’s already rocky relationship with China.

  • Talk of a TikTok sale has sparked anger and could further long-held suspicious that the U.S. aims to sabotage China’s tech scene.

Tencent is likely a bigger concern than TikTok for Beijing.

  • WeChat is a crucial link between China and its “overseas diaspora,” and is widely used by foreigners with ties to China.
  • Tencent is also much more established than ByteDance and has a history of cooperating with the Beijing government in various areas.
  • While TikTok is valued around tens of billions of dollars, it isn’t profitable globally. Tencent, on the other hand, has a market cap approaching three-quarters of a billion dollars.
  • Tencent is also a significant player in the video game industry, owning Riot Games (“League of Legends”) and holding stakes in Activision Blizzard (“World of Warcraft”) and Epic Games (Fortnite). It’s unclear whether the order will target Tencent’s businesses outside of WeChat.

TikTok doesn’t plan to go without a fight.

  • “We will pursue all remedies available to us in order to ensure that the rule of law is not discarded and that our company and our users are treated fairly—if not by the administration, then by the U.S. courts,” TikTok said in a statement.

Numbers to Consider

  • $700 Billion – Tencent’s approximate market capitalization.
  • 1.2 Billion – WeChat’s total users, which are mainly based in China.
  • 100 Million – TikTok’s estimated American userbase.


Gates Foundation Teams Up with Vaccine Maker to Produce Low-Cost Covid-19 Shots

The Bill & Melinda Gates Foundation announces it is backing the Serum Institute of India, the world’s largest vaccine maker, to produce 100 million doses of a Covid-19 vaccine for poorer countries.

Why It Matters

Governments around the world are striking vaccine production deals.

  • Both the U.S. and U.K. have reached pacts with manufacturers of promising, late-stage vaccine development projects.
  • The U.S. has spent more than $8 billion accelerating the development of Covid-19 vaccines, purchasing at least 100 million doses from AstraZeneca-Oxford, Pfizer-BioNTech and Sanofi-GlaxoSmithKline each.
  • The European Commission also reached a preliminary agreement with Sanofi for the sale of 300 million doses of a potential vaccine.

The Gates Foundation is teaming up with Gavi, the Vaccine Alliance, to make sure developing countries will have access to the vaccine if proven effective.

  • The cash influx should speed up manufacturing for the privately held Serum Institute (SII).
  • SII is one of several contracted manufacturers working to roll out the candidate co-produced by AstraZeneca and the University of Oxford.
  • SII is the go-to vaccine supplier for the WHO and is the world’s largest vaccine producer by volume.

Vaccine prices will vary, but subsidies can help offer them at cost.

  • Oxford has stipulated any successful vaccine will be sold at cost during the pandemic and AstaZeneca’s U.S. deal implies a cost of $4 a dose.
  • Moderna has priced a two-dose regimen as high as $74.
  • Johnson & Johnson’s government deal implies a per-dose price of about $10.
  • Pfizer-BioNTech’s deal suggests a two-dose price of $39.

Numbers to Consider

  • $3 – The intended price of the Covid-19 vaccine for developing countries through the SII.
  • 1.5 Billion – The number of other vaccines the SII provides each year.


A Quick Look

Uber Ridership Fails to Recover as Pandemic Drives Another Big Loss

  1. Uber posted another significant loss with little sign of recovery as its core ride-sharing business struggles through the ongoing pandemic.
  2. Gross booking for Uber’s rides dropped 75 percent year-over-year in the three months ending June 30. From Q1 to Q2, bookings fell 72 percent.
  3. Uber introduced a host of measures in May to save more than $1 billion in fixed costs, including widespread job cuts. The second-quarter restructuring did cost the company $382 million.
  4. Uber posted a $1.8 billion net loss, which was far smaller than the year-ago period when one-time costs from its IPO drove the firm’s largest-ever three-month decline. If you strip out one-off costs, Uber’s Q2 adjusted Ebitda loss reached $837 million compared to $656 million from the same period a year ago.
  5. Total quarterly revenue decreased 29 percent, going from $3.17 billion in the year-ago period to $2.24 billion. Uber’s overall gross bookings, including its food-delivery business and other operations, fell 35 percent to $10.22 billion.


Worth Your Time

More Restrictions: On top of President Trump’s executive orders targeting TikTok and WeChat, the White House has recommended a plan to restrict further Chinese companies traded on U.S. stock exchanges. Under the proposal, Chinese companies would be forced to give up their listings unless they comply with U.S. audit requirements. The plan addresses a “long-simmering dispute over U.S. regulators’ inability to inspect the financial audits of Chinese companies that sell shares in U.S. markets.” It follows bipartisan legislation passed in May that forces Chinese companies to delist in the U.S. and find a new exchange if they don’t comply within three years. (WALL STREET JOURNAL)

Back to School: A few months ago, Google announced plans to invest $10 billion in India. Now, the search engine giant is making another investment – for free. Google has partnered with the government of the western state of Maharashtra to provide educational services to tens of millions of students and teachers at no charge as it makes a further push in the world’s second-largest internet market. (TECH CRUNCH)

Home Again: In what’s becoming a trend among tech giants, Facebook is keeping its employees working from home until July 2021 due to the coronavirus outbreak and providing workers with $1,000 for home office needs. A few weeks ago, Google announced a similar move, keeping employees at home until June 2021. Apple also said it doesn’t expect staff to return to offices until at least 2021, which leaves Twitter as an outlier. The social media company embraced remote work, telling staff back in May that “they can work from home forever if they wish.” (TECH CRUNCH)


“While far-larger rival Intel has struggled with developing its latest processors, AMD is working with suppliers to boost production of its cutting-edge chips, and is on course to bring out a new generation that it hopes will maintain the performance lead it has built over Intel,” The Wall Street Journal writes.

T-Mobile ended June with 98.3 million U.S. customers, vaulting ahead of AT&T’s reported 92.9 million and becoming the country’s second-largest cellphone carrier.

The American economy gained 1.8 million jobs in July despite a coronavirus surge, though its well below the 4.8 million June increase.

Singapore police announced the first criminal charges linked to Wirecard, charging the director of a corporate services firm for allegedly faking trustee letters.

Adidas suffered another notable loss but expects a substantial recovery as stores continue to reopen and digital sales thrive.

Pfizer has signed a multi-year deal to manufacture remdesivir, Gilead’s approved antiviral medication that has for limited treatment of Covid-19.

A Couple Cents Content

Missed last night’s Live Show? No Problem! Catch up here. (YOUTUBE)

There are plenty of reasons to doubt Chinese growth in the second half of 2020, but here are three reasons not to. (POST)

Justin Oh breaks down Microsoft’s potential acquisition of TikTok and how it could impact share prices. (YOUTUBE)

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